Canada Skates Through a Status Quo Federal Election

Winter 2021/2022 Issue
By: Paul J. Brown
Canada’s federal election in September didn’t significantly change the composition of the country’s legislative body. The Liberals only gained two seats in Parliament. Getty Images

America’s northern neighbor is looking ahead to a post-pandemic world. 

If you are a U.S. citizen who occasionally thinks about Canada, America’s biggest trading partner, it’s OK if you missed the country’s six-week federal election campaign that began on August 15 and ended on September 20. Aside from providing Canadian media and the talking heads with hours of content, not much happened. And the result left Canada with a Parliament much the same as before. 

Prime Minister Justin Trudeau looked at favorable spring polls and called the election in the hope of gaining at least 170 of the 338 seats in the House of Commons. However, Canadians were not amused by the calling of the election in the middle of the COVID-19 pandemic, the Conservative leader gained some traction, and the Liberals were only able to win an additional two seats to reach 160, far short of their much-desired majority. 

Trudeau remains prime minister, but his Liberal minority must still seek Parliamentary support from the left-leaning New Democratic Party (NDP) to pass legislation. Meanwhile, the Conservatives are the primary opposition party under their new leader Erin O’Toole, and there is the ever-present Quebec-focused Bloc Quebecois.

Many Canadians were left scratching their heads as to why the election was necessary. While minority governments have a general lifespan of two years, the current government is likely to survive longer than past minorities. Minority governments generally collapse when opposition parties see an opportunity for electoral gains, or the government sees a chance at securing a majority. The result of the recent election has all parties focused on dealing with leadership issues internal to each party, and resolving those issues will take more time than usual.

The Impact on CRE

As for the election’s impact on commercial property owners and developers, little should change. Most issues affecting the sector happen at the provincial and municipal levels of government. Indeed, NAIOP Greater Toronto Area recently hosted Ontario Finance Minister Peter Bethlenfalvy, for a wide-ranging discussion of issues impacting commercial real estate, such as provincial plans for the fall economic statement (an overview of Ontario’s economy ahead of a provincial election in June 2022), ongoing issues with property reassessment, zoning and transit plans. 

That said, the federal Liberal focus on climate change issues could impact commercial properties. It’s expected that federal efforts to reduce greenhouse gases could result in an even greater push toward environmental retrofits for buildings. This could require provinces to implement new ”greener” building codes and accelerate the deployment of electric vehicle charging stations. On the tax side, someone needs to pay for all the spending of the past two years, and throughout the election campaign the Liberals and their NDP parliamentary allies openly discussed higher taxes.

The Return to Normal after COVID-19

There is a Canadian consensus in support of mandatory vaccinations, vaccine passports and testing. As a result, Canada has one of the world’s highest COVID-19 vaccination rates. Over the past several months, companies have developed protocols for a return to work, and provincial governments are moving to allow a return to normal, including the opening of sporting venues and restaurants. 

Early in the pandemic, the federal government moved aggressively to supply a range of financial support measures both to individuals and businesses. The direct payments to individuals helped thousands who lost their jobs due to COVID-19. Businesses received both direct and indirect subsidies to cover leasing costs, direct loans to offset operating losses, and wage subsidies. Most of the programs remain in place, but they are being curtailed and will likely be terminated in the coming months. 

The pandemic has also had an uneven impact on the commercial real estate industry. Office buildings remain eerily quiet, but employees are slowly returning, albeit no longer on a full-week schedule. Provincial and municipal governments across Canada are taking a range of initiatives to support a return to work, both through extensive testing and vaccination mandates and support programs. On the industrial side, the demand for warehouse space is dramatically higher across Canada, with lease rates rising accordingly and significant new development activity. 

NAIOP’s Greater Toronto chapter, along with the other Canadian chapters, will remain engaged with policymakers at every level of government on the issues impacting our industry as the economy continues to reopen. Economic activity within city centers will return as business restrictions continue to be lifted.

One final note: Canadians welcomed news that the U.S. will soon allow vehicle travel across the 5,500-mile-long border, so for those living near the 49th parallel or in traditional vacation spots further south, look for Canadian license plates once again.

Paul J. Brown is a principal with Campbell Strategies and the government relations advisor for NAIOP Greater Toronto.